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Crime and residential mortgage default: an empirical analysis

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  • Robert Feinberg
  • David Nickerson

Abstract

This paper is the first to quantify the effect of crime rates on rates of default of residential mortgages. Based on a model of default in which crime rates can affect the liquidity of mortgageholders as well as their default option through property values, regression analysis is used to analyse default rates over a pooled sample of residential mortgages for all US states during 1981-1994. This study finds that crime, possibly acting as a proxy for more general economic conditions, significantly affects both the rate and timing of mortgage default.

Suggested Citation

  • Robert Feinberg & David Nickerson, 2002. "Crime and residential mortgage default: an empirical analysis," Applied Economics Letters, Taylor & Francis Journals, vol. 9(4), pages 217-220.
    • Handle: RePEc:taf:apeclt:v:9:y:2002:i:4:p:217-220
    DOI: 10.1080/13504850110058504
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    References listed on IDEAS

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    1. Julie Berry Cullen & Steven D. Levitt, 1999. "Crime, Urban Flight, And The Consequences For Cities," The Review of Economics and Statistics, MIT Press, vol. 81(2), pages 159-169, May.
    2. Dennis R. Capozza & Dick Kazarian & Thomas A. Thomson, 1998. "The Conditional Probability of Mortgage Default," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 26(3), pages 259-289, September.
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    Cited by:

    1. David Nickerson & Robert Jones, 2017. "Collateral Risk and Demographic Discrimination in Mortgage Market Equilibria," Review of Economics & Finance, Better Advances Press, Canada, vol. 9, pages 13-28, August.
    2. Sourav Batabyal, 2011. "Temporal Causality and the Dynamics of Crime and Delinquency," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 39(4), pages 421-441, December.

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